Anheuser-Busch (BUD), having formally rejected the $65/share InBev takeover offer, now must pretend it’s serious about trying to create shareholder value (at least for a while). Thus, the company has announced a new restructuring plan that will likely include:
- $1 billion in cost-cutting
- massive firings
- selling off assets like theme parks
Why did it take InBev’s offer to force BUD to improve itself? Perhaps because, after four generations, the Busch family had come to regard its management of the company as a right, not a job. In any event, here are more specific details (Reuters):
[R]educe lump-sum pension payouts to staff and raise employee healthcare contributions as part of a strategic plan,
Cut 10 to 15 per cent of 8,600 employees through early retirement and attrition,
speed up price hikes to cope with rising commodity costs, and
set earnings forecasts that exceed Wall Street’s expectations.
One reason BUD, politicians, and St. Louis opposed the InBev takeover was InBev’s reputation for ruthless cost-cutting. At least management knows a good idea when it sees one.
Complete BUD-InBev News and Analysis
Anheuser-Busch (BUD) Next Steps: InBev Threatens Hostile While Quietly Raising Bid (BUD)
Anheuser-Busch (BUD) To Reject InBev Offer: No Surprise, Just The Beginning (BUD)
St. Louis Furious At Buffett For Supporting Anheuser-Busch (BUD) Sale (BUD)
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